A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Schwarzenegger's Health Proposal: "Massachusetts on Steroids"

Schwarzenegger's Health Proposal: "Massachusetts on Steroids"

January 8, 2007

Credit to NPR's Julie Rovner for the "MA on steroids" one-liner. Click here for the NYT article on CA Gov. Arnold Schwarzenegger's universal health proposal. It's big, it's bold, it's risky -- and you've got to give the Governator credit for producing a plan that lives up to the advance hype. This proposal delivers:

-- The plan aims to cover nearly all 6.5 million uninsured in California -- and, if enacted, might just do it.

-- All businesses with 10 or more employees that do not provide coverage would have to pay a 4% payroll tax to the State (the MA law requires a $295 annual contribution -- the House approved version would have required a 5-7% payroll tax on non-covering firms).

-- Insurers would no longer be able to write or deny coverage based on an individual's medical condition (MA outlawed such practices back in 1996).

-- All individuals would be required to purchase coverage, with significant subsidies to help lower income individuals pay for coverage. (Close to the MA version.)

-- Hospitals would be assessed 4% of revenues and physicians would be assessed 2% of revenue, and Medi-Cal providers would be given rate increases (the MA law gives significant MassHealth rate increases to hospitals and physicians, with no new assessment on others).

-- Everyone would be eligible for subsidies and assessments, including undocumented immigrants (in MA, only legal immigrants are eligible for new subsidized coverage).

In a word, wow.

How will an overwhelmingly Democratic legislature (which last year passed a single payer bill -- without financing -- which Schwarzenegger vetoed) react?

The Massachusetts law was constructed to provide benefits to everyone possible and minimal pain to anyone. The Schwarzenegger plan has something to alienate almost everyone -- business will hate the payroll tax; docs and hospitals will hate the assessments; many insurers will balk at a ban on medical underwriting; many consumers will balk at the individual mandate; progressives will claim it's way to stall single payer. Not a promising political recipe.

But give Arnold credit. Health reform is back in a big, audacious and gutsy way. No way this issue is going down quietly.